My name is Kenneth and I write cool Mac and iPhone software. This is my personal weblog where I post about stuff I find interesting. I usually write about Mac development, the business of shareware and the Mac community in general.

[Note: I hope this article doesn’t break the NDA, but if it find out it does and I get a Cease & Desist from Apple, I will have to take it down.]

When you upload an iPhone application to the App Store through iTunes Connect, you’re presented with a few screens of information to fill in. First, there’s the screen where you put the Application’s description, category, and any other textual information about it.

Then there’s the screen where you upload the binary, the icon(s), and screenshots. And lastly there’s a screen to set the price. Unlike what I thought would be the case, you cannot chose a specific price. You get to chose from several price groups. A price group has a price in US Dollars, and a price in different currencies usually of a similar value. (For example, a $0.99 app in Switzerland is CHF 1.10)

At the top of this page, there is a little warning message that says you need a contract with Apple if you’re going to put up non-free apps. I did not pay too much attention to it, and the rest of the process seemed to go smoothly, eventually leading back to a page where I could see my app was “In Review”.

I was still slightly confused about this contract message, and decided to find out what it was about. I asked a few fellow developers, and found out that Apple would not sell my app until the contract was taken care of.

In iTunes Connect, there is a section on contracts, with a link to create a new contract. A contract is made of three parts; Contact Details, Banking Details and Tax Details.

Contact Details

This is very straightforward. I just had to fill in my full contact details. (Including physical address.)

Banking Details

This is slightly more complicated. I’m with one of the smaller Swiss banks, and I wanted to use this account for my App Store revenue.

One of the things Apple requires is a SWIFT code. Luckily, I’m with a Swiss bank, and these tend to be very professional. I just had to give my bank a phone call, and I had my SWIFT code. However, after reading a recent topic on the MacSB mailing list, it appears to be very common for many of the smaller banks in the US and other countries not to have SWIFT codes. In which case you’re screwed and you’ll have to open a new account with a bank that has a SWFT code. (Apple recommends Bank of America.)

Another thing required by Apple is the IBAN. International Bank Account Number. My bank informed me that they printed these on all the bank statements they issued. However, I didn’t have any bank statement around. It wasn’t too hard getting this number. Switzerland has a standardized way of building these numbers from your CB Number (Clearing Banquaire - this is what we call Branch IDs) and your account number. A handy little script I found on the web would take this info and convert it into an IBAN. (I later found one of my Bank statements, and the IBAN generated did indeed match the one on the statement).

Apple also asked for the Branch ID (I put my CB number for this) and account number, and another number called the SIC / Short Code. I researched it a bit, and it looks like I didn’t need it. I just left that field blank.

Tax Details

This is where it gets nasty. Note that this is not an Apple thing, this is government tax regulation. Apple provides an online version of the government form W-8BEN. It seems I am not obligated to fill this form in, but if I don’t, Apples keeps another 30% of my revenue as anticipated taxes. This, with the 30% commission they take from every sale, leaves me with only 49% of my gross sales. (70% * 70% = 49%)

This form is extremely cryptic, and I filled it in to the best of my knowledge. This, however, wasn’t enough for Apple. The form complained about missing information. It’s only then that I realized that Apple provides a handy tip sheet explaining how to fill the form in, and what are the most common answers.

With this information, I was able to understand and fill in most of the form. Except for one field: Taxpayer Identification Number. Since I’m not a US resident (although I’m eligible for citizenship by blood, and plan to apply soon), I did not have this information. Apple’s tip sheet luckily had a small paragraph regarding this. An EIN (Employer Identification Number) would do. To get an EIN, I had to download another form entitled SS-4.

This form was even more cryptic than the previous one. It is obviously made for more traditional companies, and had questions asking how many employees I have in different field, how much wages I paid them, where and when my company was incorporated, and a bunch of other tax-related questions. It also asked a few things I couldn’t fill in, such as my SSN (Social Security Number - I don’t have one). I phoned the IRS (Internal Revenue Service) - the government entity I had to submit the form to - and it turned out this field wasn’t necessary. In response to the question “Check one box that best describes the principal activity of your business”, there of course wasn’t anything about technology. I had to tick “Other (specify)” and enter “Royalties”.

There is three way you can submit the form. Firstly, you can do it the traditional way of mailing it by post. But this would take a minimum of 4 weeks. Second way would be by fax, but this would also take at least 1 week. The third way is actually pretty clever. You fax while you’re on the phone.

Problem: my phone and my fax are on the same phone line. Meaning I can’t do both at the same time. I do have a cellphone, but phoning oversees for a good half hour at least from a cellphone would be so outrageously expensive it didn’t make any sense. Luckily, I though of a brilliant idea, and opened a Skype Out account. The audio quality wasn’t very good, but at least it worked. After another hour of phoning, I finally had my EIN and could submit the W-8BEN form to Apple.

Everything seems to be in order as of now. My app is still in review, but expect it in the app store soon.

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Australian developers should note that they also need to provide Apple with copies of their ABN/GST registration. (If you do not have an ABN you need to register your Business Name, and get a number. You also have to register to take in GST before you can sell anything in the Australian iTunes Store.)

I contacted Apple’s tax people regarding the tediousness of the EIN/W-8BEN process. Here’s the form letter I received today:

“Since the App Store contracts are characterized as a “sales/commission” agreement, as opposed to a “royalty” agreement, there will be no tax withholding in the United States. Therefore, we would still like you to complete the W-8BEN form, however, you are not required to obtain a new US Taxpayer Identification Number if you do not already have one.

Please enter nine zeros (000000000) in the space provided in section 6. In addition, payments from the USA App Store will not be reported to the IRS on form 1042 at year end.

If you have any further questions, please don’t hesitate to contact us.”

Adam Stone surmises

December 3rd, 2008 at 2:45 am

I think this article is surprisingly informative and well written, despite a few minor grammatical errors (hardly noticeable, don’t sweat it). It was a great inside look into the process of submitting an application to the App Store on iTunes. I learned a lot, and now understand why the App Store isn’t flooded by people with bad apps, ha ha. Great job, keep it up!

Congratulations exclaims

March 5th, 2009 at 4:38 pm

Hey Ken,
Congratulations!

It looks like you will need to fill in a US tax form every year for the rest of your life thanks to that EIN!

Casper B. Hansen whispers

April 21st, 2009 at 12:37 pm

Was looking for info on what to put in the Branch / Branch ID field, i thought great, you had it figured, then you say you put your CB number … which is … not very useful info to someone from another country ..